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Steve Ahillen
By Steve Ahillen March 2, 2012

No new taxes yet

The promise not to raise taxes has been a Republican war cry for a number of years and candidate Bill Haslam on the campaign trail was adamant about continuing the pledge.

His campaign literature, titled "Bill Haslam: The Right Experience,” included the following passage:

"I know it's not going to be easy when the next governor takes office, but taxes are job killers. The last thing we should do is raise taxes on a population that is already struggling and a small business community that has been forced to cut back. ... Tennessee already has the highest combined state and average local sales tax rate in the nation and I will not allow it to get any higher."

Into his second year  in office,  Gov. Haslam has held true to the course. Taxes have not been raised. In fact, he can point to at least one instance in which he has overseen trimming of some taxpayer expenses.

On June 8, 2011, he signed a bill that raised the income level for those receiving exemptions to the Hall income tax by $10,000. The Hall tax, named after former state Sen. Frank S. Hall who sponsored the legislation, was enacted in 1929 and applies to money earned from interests and dividends off investments. The exemption has applied to single filers older than 65 with total income less than $16,200 ($27,000 jointly). Those total income numbers will go up to $26,200 single, $37,000 jointly starting with the 2012 tax return to be filed next year.

Then, in announcing his legislative package on Jan. 10, 2012, in Nashville, Haslam listed as one of his goals lowering the state portion of the sales tax on food from 5.5 percent to 5.0 over three years. The first step, a reduction from 5.5 to 5.3 percent, is accomplished in a Haslam-backed bill introduced in the Legislature this year.

At the same time, however, the governor says he's opposed to bills filed by legislators of both parties that would push the food tax cut faster than his proposal. He also says he is opposed to pending bills that would sharply reduce or abolish the Hall income tax.

Another part of the Haslam 2012 legislative package is a bill that would raise the exemption level on estate tax from $1 million to $1.25 million this year. He says his goal is to eventually raise the exemption level to $5 million over a period of years, matching the exemption level now set for the federal estate tax, which Republicans prefer to call the "death tax.” As things stand now, Haslam says Tennessee's inheritance tax is higher than those of most other states and some wealthy Tennesseans are moving to Florida or elsewhere to avoid dying in Tennessee and having heirs face a higher tax bill.

Some have raised the idea that a Haslam-negotiated deal with could be seen as a tax increase, because under the resulting legislation – now pending before the Legislature – Amazon will begin collecting sales taxes from its Tennessee customers on Jan. 1, 2013, that it is not collecting now. Haslam says that is not the case.

"This isn't a new tax; this tax was already due. This was just a question of Amazon collecting it themselves.”

Calling the Amazon deal a tax increase seems a reach to us, too. So, we'll give this a Promise Kept for now.

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